Use of the mark “in the course of trade” as a requirement for infringement: can use in a trading business be involved if someone pays you with cigarettes and alcohol?
Sapin Intellectual Property Commentary
A judgment by the Court of Justice of the European Union (CJEU) has concluded that to determine whether use “in the course of trade” exists it is irrelevant whether the mark is used in the course of a person's trade or whether any consideration is received. The key lies in the receipt (import) of the goods and in the fact of those goods not being intended for private use.
In the European Union, the registration of a mark confers on its holder the exclusive right to use it and, more significantly, the right to prevent unauthorized third parties from using it. It does not prohibit any type of use, however. The unauthorized use is unlawful if it takes place “in the course of trade” (see article 10.2 of the Trade Mark Directive). In other words, mark infringement only exists if the mark is used in the course of trade for the purposes of distinguishing goods or services.
But, what does trade actually mean? The Court of Justice of the European Union on April 30, 2020, in a judgment on April 30, 2020 (case C-772/18),clarified this question following the request for a preliminary ruling submitted by the Finland Supreme Court.
The facts are briefly as follows. A person resident in Finland received from China a consignment of 150 ball bearings identified with the mark INA. After customs clearance, the person took the consignment to his home and later delivered them to a third party to be exported to Russia. And what payment did the person receive? A carton of cigarettes and a bottle of brandy.
The Helsinki Court of Appeal held that the person’s activity had been confined to storage and onward transport, neither for profit, and concluded that the received remuneration (cigarettes and alcohol) should be treated as consideration for the storage of goods on behalf of a third party, but could not be regarded as economic exploitation of goods in the course of a business, or, in other words, an instance of “use in the course of trade”.
Following an appeal against the judgment, the Supreme Court submitted four requests for preliminary rulings to the CJEU which may be summarized in one: whether it may be construed that a person not carrying on a trading business and receiving the good from a non-EU country for the only purpose of sending it to another non-EU country is using the mark “in the course of trade”, where the good concerned is clearly not intended for private use.
And the answer is yes. We do have “use in the course of trade” determined by the conditions laid down by the Directive. That conclusion, the CJEU observes, must be determined on the basis of objective factors and the following are described:
The goods at issue are ball bearings weighing more than 700 kg and are intended to be used in heavy industry. From their nature and their volume it may be inferred, therefore, that the ball bearings are manifestly not intended for private use. Namely, the transactions related to this consignment of goods must be found to fall within a trading business.
By making known his address as the place to which the goods concerned are to be shipped, completing customs clearance through an agent, and releasing the goods for free circulation, the person is importing those goods within the meaning of article 10.3.c) of the Trade Mark Directive (formerly article 5.3.c)).
Although he was acting in the economic interests of a third party, the person was indeed using the trade mark, because to identify that use it is irrelevant that he is not the owner of the infringing goods.
For the CJEU, the fact that a person has imported the goods and released them for free circulation justifies in itself that the person has acted in the course of trade. Therefore, whether any subsequent treatment of those goods took place is irrelevant (storage, being placed on the market, exported, and so on);
Lastly, the significance or nature of the remuneration received by the person is also irrelevant, even if it was a carton of cigarettes and a bottle of brandy.
The conclusion? To determine whether use in the course of trade exists it is irrelevant whether a person is using the mark in a trading business. It is equally irrelevant whether that person receives consideration for the activity concerned. The key lies in the receipt (import) of the goods, even if it is for the benefit of a third party, and in the fact of the goods clearly not being intended for private use.
Cristina Mesa, principal associate of the Garrigues Intellectual Property Department